Location and Its Effect on Logistic Planning - Essay Example

? LOG503 MOD 3 Case Assn - Logistic Planning Introduction The decisions concerning logistic plan is regarded as a major and essential practice especially for a manufacturing industry that facilitates easy accomplishing predetermined business objectives. As per the logistic planning that execute by the modern organizations in this modern day context, it has been viewed that they adopt as well as implement effective logistical panning methods that enables them towards properly organizing the organizational products which are to be offered to the final consumers. In general, an appropriate planning as well as controlling the materials flow and information is one of the main objectives of logistic management of an organization (Macmillan Publishers Limited, n.d.). Ford Motor Company (Ford) is regarded as one of the leading manufacturers of automotive products throughout the globe (Austin, 2001). On the basis of the aforementioned concern, the paper intends to briefly discuss about the logistic strategies of Ford in the global automobile industry. Moreover, the location design of Ford concerning distributors or retail, influence of the customers towards location decision of Ford and its effect on logistics will also be taken into concern in this paper. Impact of Location and its affect on Logistic Planning The location of production as well as distribution units can impose significant impact and affect logistic planning of any organization. This is owing to the reason that an effective location plan can facilitate an organization to increase the satisfaction level of the customers by providing them their desired products at the right time. It has been apparently observed that an extensive network of suppliers and distribution channels is regarded as one of the major strengths of Ford that enabled the organization to gain momentum in the global automobile market. In order to maximize the production efficiency of the organization, the plant location is recognized to be an imperative factor for the automobile organization. With this concern, the plant location of Ford significantly incorporates the availability of resources, suppliers as well as the demand of the customers surrounding the location. It can be stated that Ford further had to consider the cultural perspectives concerning the locations of its different production as well as distribution units with the intention of increasing the satisfaction level of the customers at large (Leontiades, 1987). In general, the location concerning plant and logistic network can be effectively organized or managed depending upon the tradeoff scenario of any particular organization. The significant concern of plant location generally encompasses different factors such as material cost, labor cost, infrastructure facilities, business services, customer or market, available suppliers as well as resources, government regulations and existing competition (Lu, Kuo, Tseng & Liaw, 2007). With this concern, the logistic network and overall supply chain management activities of Ford are conducted by Penske Logistic. In this similar context, Penske has been identified to be a leading service provider of logistics for Ford since the year 1999. It executes streamline operations for Ford through adopting as well as implementing six-sigma initiatives in terms of maintaining and creating more effective as well as centralized logistic network. As the leading logistic provider of Ford, Penske performs effective and quality based logistic management functions that further ensure to mitigate different challenges resulting from inbound inconsistencies, unnecessary costs and shipment overages (Penske, 2013). Comparison of Location Decision of Ford To a Distributor According to the global business scenario, it can be recognized that the exact location choice is quite important for an organization to accomplish its predetermined business targets. In order to determine effective location decisions, the organizations in this present day context must need to focus upon enhancing their various infrastructure facilities like inventory quality, lead time and production cycle among others (Meijboom & Vos, 1997). In relation to Ford, the organization tends to locate its manufacturing plants in such a way so that it can develop new products, minimize operating costs and utilize adequate resources as well as technological advancements. According to the present day context, Ford encompasses nearly 1,500 suppliers and 4,000 distributors across different regions of the world. The logistic networking channels of the organization provide extensive services to a large group of global customers through its diverse selling units ranging from tiny dealers to wholesalers. In relation to determine the distribution process of logistics, Ford exploits six-sigma initiatives by coordinating with Penske in order to improve and streamline its overall supply chain management system. The various goals of Penske concerning its logistics management can be identified as centralizing logistic networks, improving performances of the suppliers as well as carriers and providing real-time accountability relating to logistics and finances of Ford (University of San Francisco, 2013). To a Retail Location From the perspective of retail locations, Ford executes effective strategies that facilitate the organization to accomplish sustainable position in the global automobile industry. The organization currently operates approximately 70 plants in different countries that involve production of world-class vehicles and related parts along with accessories. According to the organizations’ global performances, it has been observed that most numbers of vehicles are delivered by its distributors, wholesalers and dealers. The organization, therefore, created different dealerships, distributors as well as wholesalers in different locations in accordance with meeting the requirements of the global customers. Hence, it has been observed that Ford significantly positions its selling points through active involvement of the wholesalers, distributors, local dealerships as well as different retailing points that can facilitate its ultimate consumers to acquire their desired products (Ford, 2011). The logistic system of Ford is made up of effective facilities that have been linked with its own superior transportation capacity. The organization includes production as well as assembly centers, distribution centers, transportation terminals as well as warehouse facilities that enable it to quickly deliver its products to its retailers, wholesalers and other dealership points (Ford, 2011). Influence of Customers to each Location Decisions of the Organization and it’s Affect on Logistics The logistics management of Ford considerably focuses upon providing right products to its customers at the right time in a more convenient way. Therefore, the organization tends to locate its different distribution as well as retail selling units according to the market demand. Moreover, the organization further recognized to increase its annual investments particularly upon its logistic segment and distribution centers in order to facilitate its global customers by a significant level. The recent business portfolio of the organization portrays an increasing volume of its broad assortment of automobile products that have been broadly accessed in different regions of the world. It has been apparently observed that the product strategy of Ford increasingly changed over the two past decades. For instance, the volume of products of Ford observed to be increase by 32% in the Asia Pacific market, 43% in America and 25 % in the UK market particularly in the year 2011. Therefore, it can be stated that the distribution as well as retail operations of the organization are considerably influenced by its global customers (Ford, 2011). With this concern, it can be affirmed that the influence of the global customers can further affect the company’s’ overall logistics performance. Owing to the fact concerning the increasing market competition in the automobile industry, it is essential for the organizations to make their respective products available to its valuable customers that may facilitate them to acquire their desired products at the very right time. Moreover, the strategy of increasing the number of distribution channels, retail operations and adopting other supply chain initiatives can also facilitate Ford to sustain its long-term business operations in the global automobile industry (Anderson, Jerman & Crum, 1998). However, the influences of customers to each organizational location can also significantly affect the logistics of Ford by a greater degree. This can be due to the reason of increasing competitors in the respective business market, increased supply as well as demand of the products and augmented customers’ product choices. Conclusion In accordance with the factors like increased level of globalization, market competition and internationalization, it has been viewed that the modern organizations seek to improve their respective locations of their production and distribution units along with logistical planning. In relation to Ford, the organization has been implementing exceptional business strategies and decision-making procedures that enabled it to achieve significant responses from various corners of the world. Moreover, the developed supply chain management and effective logistic management process are the major crucial factors for Ford to sustain its leading position in the global automobile industry. Furthermore, Penske has been noted to perform a major part for the organization linked with logistic planning that eventually influenced the customers towards procuring the different products of Ford by a considerable level. References Anderson, R., Jerman, R. E., & Crum, M. R. (1998). Quality management influences on logistics performance. Transpn Res.-E, (Logistics and Transpn Rev.) 34(2), pp. 137-148. The article depicts about the significance of quality management based practices in terms of ascertaining the attainment of operational outcomes as well as customer satisfaction in case of logistics. Moreover, the influence of quality management upon performance of logistics has been highlighted in the article. Austin, R. D. (2001). Ford Motor Company: Supply chain strategy. Retrieved from https://mytmc.thomasmore.edu/ICSFileServer/c41b13c2-f0d7-4815-949e-0ac0cc0cc373/71f1b912-71c8-4506-a753-d6c45439e4dc/85a30039-8928-4665-a179-70b15003b584/OPS660%20case%20Ford%20Motor%20Co%20Supply%20Chain%20Strgy.pdf The case intends to discuss about the supply chain strategies incorporated by Ford Motor Company. With the incorporation of new technologies, there has been an inevitable requirement for introducing new business models in Ford. Moreover, Ford’s prevailing supply chain as well as customer responsiveness related initiatives have been depicted in the article. Ford. (2011). Profitable growth for all. Retrieved from http://corporate.ford.com/doc/2011_annual_report.pdf The annual report of the year 2011 of Ford Motor Company depicts the prevailing scenario of the company in terms of strategic initiatives taken as well as overall highlights of operating financial performance. Moreover, the annual report also portrays an evident perspective of present as well as future presented by the Chief Executive Officer (CEO) of the company. Leontiades, J. C. (1987). Multinational corporate strategy: Planning for world markets. United States: Lexington Books. The book presents a comprehensive overview of appropriate multinational corporate strategies that are suitable for preparing adequate plans for meeting the global market trends. Lu, I., Kuo, T., Tseng, H., & Liaw, Y. (2007). Global logistics planning: How a location criterion affects a new plant setting ---An empirical study on the motorcycle industry. Retrieved from http://www.bm.nsysu.edu.tw/tutorial/iylu/12th%20ICIT/04-02K.pdf The article presents an assessment of global logistics planning requirements. The key aim of the article is to assess the way a location related criterion generally affects a new plant based setting. The article presents a study of motorcycle industry. Meijboom, B., & Vos, B. (1997). International manufacturing and location decisions: Balancing configuration and co-ordination aspects. International Journal of Operations & Production Management 17 (8), pp. 790-805. The journal article demonstrates various considerations regarding international manufacturing as well as location related decisions. The aspects such as location, configuration and coordination play major parts in case of logistics related activities. This crucial aspect is described in the article. Macmillan Publishers Limited. (n.d.). Logistic and supply chains. Retrieved from http://www.palgrave.com/uploadedfiles/Business/Waters/waters_sample_chapter.pdf The paper is based on understanding the key concepts of logistics and supply chains. The key role played by logistics and the aims of logistics as well as importance of logistics is among the major facets discussed in the paper. Penske. 2013. Ford Motor Company: six sigma initiatives streamline operations. Retrieved from http://www.penskelogistics.com/casestudies/ford2.html The article depicts about the six sigma based initiatives taken by For Motor Company. The associated challenges and results or solutions are described in the article. The various aspects related to consolidating the logistics operations to attain streamlined six sigma operations are depicted in the article. University of San Francisco. (2013). Six sigma helps drive Ford Motor Company’s supply chain management. Retrieved from http://www.usanfranonline.com/six-sigma-helps-drive-ford-motor-companys-supply-chain-management/ This article describes mainly about the various ways six sigma facilitates Ford Motor Company’s supply chain management. Bibliography Ghiani, G., Gilbert, L., & Musmanno, R. (2004). Introduction to logistics Systems planning and control. Retrieved from http://www.pc-freak.net/international_university_college_files/Introduction%20to%20Logistic%20Systems%20Planning%20&%20control.pdf The article presents a concise understanding regarding logistics systems planning and control procedures. The article can be an invaluable guide to comprehend the different relevant aspects regarding logistics planning. Read More